American Riviera Bank Reports Strong Capital Position

SANTA BARBARA, CA -- (Marketwire) -- 10/28/09 -- American Riviera Bank (OTCBB: ARBV) today reported healthy capital levels and continued growth in deposits and net interest margin during the third quarter.

Jeff DeVine, President and Chief Executive Officer, stated, "We are pleased with the core performance that American Riviera Bank demonstrated by the growth in our net interest income and margin. As expected, in response to economic conditions we bolstered loan loss provision in the third quarter, however our loan relationships continue to be well managed and closely monitored. We believe the Bank is well positioned for continued growth and consistent profitability when credit conditions improve."

American Riviera Bank's deposits grew 5% during the quarter, reaching $109.2 million at September 30, 2009 (3Q2009), with almost 80% representing core deposits and a 71% increase in deposits from September 30, 2008 (3Q2008). The Bank's cost of funds decreased to 1.73% in 3Q2009 from 2.22% in the quarter ended June 30, 2009 (2Q2009). The Bank remains committed to making high-quality, relationship loans in our community and reported total loans of $104.8 million as of 3Q2009, an increase of 34% or $24.9 million, from 3Q2008. The Bank's net interest income increased 38% to $2.6 million for the nine-month period ended September 30, 2009 compared to the same period last year. The Bank's net interest margin was 4.17% for 3Q2009, up from 3.95% for 2Q2009, which contributed to an increase in net interest income of $101,000 for the quarter.

During 3Q2009, American Riviera Bank identified specific weaknesses in certain loans and took appropriate and conservative actions. The Bank made a decision to move $6.4 million of loans to non-accrual and charged off $826,000 in loan principal during 3Q2009. Remaining principal on such loans is fully supported by real estate collateral at current appraised value. As of 3Q2009, the Bank had only $124,000 in loans past due greater than 30 days that were still accruing interest. In response to economic and credit conditions, the Bank provided an additional $1,089,000 in loan loss provision during 3Q2009 and increased the allowance for loan loss to total loan ratio to 1.61% at 3Q2009 as compared to 1.38% at 2Q2009. Management believes the allowance for loan loss at 3Q2009 is adequate to provide for probable losses inherent in the loan portfolio at this time based on the historical performance of the loan portfolio to date and the extensive monitoring and value testing recently performed.

The Bank reported an unaudited net loss for 3Q2009 of $1,024,000 that includes $1,089,000 in provision for loan losses and a $312,000 reduction in fair value of other real estate owned. Excluding these items the bank would have generated earnings of $377,000 for 3Q2009. The Bank continues to maintain a strong capital position with a Tier 1 Leverage ratio of 13.6% at 3Q2009, well above the regulatory guideline of 5% for well capitalized institutions.

Company Profile

American Riviera Bank is a full service community bank, focused on serving the lending and deposit needs of businesses and consumers in our community. The Bank was founded in 2006 by over 400 local shareholders and has one branch located at 1033 Anacapa Street in downtown Santa Barbara.

Statements concerning future performance, developments or events concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, effects of interest rate changes, ability to control costs and expenses, impact of consolidation in the banking industry, financial policies of the US government, and general economic conditions.

Contact:
American Riviera Bank

www.americanrivierabank.com
805-965-5942
Michelle Martinich